BHP, presenting at an investor briefing in Adelaide, highlighted the potential to increase production at Olympic Dam even further in the coming years through the brownfield expansion option (BFX), which is being considered for investment.

Olympic Dam president Jacqui McGill said the BFX option could provide a capital efficient path to increased capacity through accelerated development into the Southern Mine area.

“As we move into the Southern Mine area we expect to see the copper grade increase by three per cent by financial year 2023, which we believe would coincide with a structural deficit in the copper market,” McGill said.

“If approved, the BFX option could lift production capacity by 330,000 tonnes of copper per annum and move Olympic Dam into the first quartile of the cost curve, which is where we strive to be with all our assets at BHP.

“Any investment however, must compete for capital against all other options, including returns to shareholders.”

McGill said other long-term development options, including the use of heap leach technology, also had the potential to increase Olympic Dam copper production.

BHP’s Australian minerals president Mike Henry, also speaking at the briefing, said the company’s Australian assets underpinned current margins and future optionality.

“With our global technology initiatives and asset-level programs to unlock resources and lower costs, we expect our Australian mining operations to deliver $US1.6 billion of additional productivity gains over the next two years,” Henry said.

He said BHP had substantially reduced unit costs at the company’s Australian operations over the past five years by sharing knowledge and replicating best practice across its global operations.

“But we have further to go. We can make ourselves safer and even more productive, and expect to lower our unit costs by a further 10 per cent over the medium-term,” he said.